Jindal Steel & Power may gain on comissioning Billet Caster plant

Jindal Steel & Power (JSPL) after market hours yesterday, 10 December 2014 said it has commissioned the Billet Caster plant as part of the 6 million tonnes per annum (MTPA) integrated steel project at Angul, Odisha.

Shares of natural gas utility companies will be in focus after the Minister of State (I/C) for Petroleum & Natural Gas Dharmendra Pradhan informed the Rajya Sabha in a written reply yesterday, 10 December 2014, that Petroleum & Natural Gas Regulatory Board (PNGRB) has envisaged a phased roll out plan for development of city/local natural gas distribution network in the country, which includes 8 districts of Bihar.

Shares of power generation companies will be in focus after Minister of State (IC), Power, Coal and NRE Piyush Goyal yesterday, 10 December 2014, said that there will be no increase in power tariff post e-auction of coal mines and the focus will be outcome oriented. Goyal said that new Electricity Amendment Bill would be introduced soon in the parliament. Goyal was speaking as the lead speaker in the First Plenary Session on 'Infrastructure and Growth' at the two-day Delhi Economic Conclave 2014.

PSU banks will be in focus after the Union Cabinet chaired by the Prime Minister, Narendra Modi, on Wednesday, 10 December 2014, gave its approval for allowing Public Sector Banks (PSBs) to raise capital to meet their additional capital requirements under BASEL-III by diluting Government holding upto 52% in a phased manner. Out of 27 PSBs, Government of India controls 22 through majority holding. In the remaining 5 banks, SBI holds majority stake. These 27 PSBs control 70% of total branches, deposits and credit in the Indian banking system. Gol has regularly been infusing incremental capital in PSBs. Basel-Ill capital adequacy norms will be fully phased in and applicable by 31 March 2019. Capital requirements of banks have increased under Basel-Ill.

As per Basel-Ill norms the minimum Tier-1 has to be 7%. In addition, Banks require another 2.5% of Common Equity as Capital Conservation Buffer. In all, Banks need a total of 9.5%. The quantum of capital support needed by banks is huge, which cannot be funded by budgetary support alone. The main concern of Gol primarily pertains to Common Equity Tier-I capital of 5.5%.

Going by past trends by taking average Gross Domestic Product (GDP) growth rate for the next five years as 6.5% and dividend pay-out ratio as 20 percent as percentage of net profit or 0.80 of risk weighted assets and credit growth rate at 18% and further RWAs growth at 16%, the total capital would be Rs.460120 crore (Rs 239720 crore Common Equity Tier-I) (Rs 155900 crore Additional Tier-I) and (Rs 64500 crore Tier-II).

The total support provided to PSBs towards capitalisation during the last four years stands at Rs 5 8634 crore. The provision for the current year is at Rs 11200 crore and the total market cap of Government shareholding as on 30 May 2014 stands at Rs 419711 crore.

If the PSBs are permitted to bring down GOI holding to 52 percent in a phased manner, they can raise upto Rs 160825 crore from the market. Gol budgetary support needed for 2015-19 would be Rs 78895 crore only, which will maintain Gol holding at 52%. However, as Govt. is likely to receive an amount of Rs 34500 crore from PSBs as dividend, the net outgo will only be Rs 44395 crore.

While permitting banks to raise capital from the market, the banks would be advised to preserve the Government holding at minimum 52% and increase the public shareholding in a phased manner through the issue of shares largely to retail investors that is to common citizens of this country.

Meanwhile, the Union Cabinet chaired by the Prime Minister, Narendra Modi, on Wednesday, 10 December 2014, gave its approval for continuing interest subvention to Public Sector Banks (PSBs), Private Sector Banks, Regional Rural Banks (RRBs), Cooperatives Banks and National Bank for Agriculture and Rural Development (NABARD) to enable them to provide short-term crop loans up to Rs 3 lakh to farmers at 7% per annum during the year 2014-15. To provide additional interest subvention of 3% per annum to those farmers who repay on time, that is within one year of disbursement of their short-term crop loans taken during the year 2014-15. It also gave approval to permit the release of Rs 18583 crore as interest subvention for 2014-15 of which Rs 4399 crore subvention to NABARD for refinance to Cooperatives Banks and RRBs and Rs 14 184 crore to Public Sector Banks, Private Sector Banks, RRBs and Cooperative Banks for subvention on their own funds.

Insurance stocks will be in focus after the Union Cabinet, chaired by the Prime Minister Narendra Modi, on Wednesday, 10 December 2014, approved the officials Amendments to the Insurance Laws (Amendment) Bill, 2008 and introduction in the Rajya Sabha when the Bill is taken up for consideration and passing. The Bill is aimed at removing archaic and redundant provisions in the relevant legislations and to enable the insurance sector to work for the betterment of the insured with greater efficacy.

NTPC, NHPC, and Coal India will be in focus. The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, has approved the scheme for setting up of 1000 MW of Grid-Connected Solar PV Power Projects with VGF (Viability Gap Fund) support of Rs.1000 crore, by CPSUs under various Central/State Schemes, in three years period from 2015-16 to 2017-18. The Scheme will have a mandatory condition that all PV cells and modules used in solar plants set up under this Scheme, will be made in India. The CPSUs and Government of India organisations like NTPC, NHPC, CIL, IREDA, Indian Railways, etc. are coming forward to set up solar power projects. The scheme has a provision of VGF support of Rs.1000 crore for setting up of Grid-connected solar PV power projects of 1000 MW aggregate capacity to be developed by CPSUs under various central/state schemes by using cells and modules made in India.

PSU OMCs will be in focus. The CCEA, chaired by the Prime Minister Narendra Modi, has approved a mechanism for procurement of ethanol by Public Sector oil marketing companies (OMCs) to carry out the ethanol blended petrol (EBP) program. The CCEA approved replacing the current procedure on ethanol viz. delivered price of ethanol may be fixed in the range of Rs.48.50 per litre to Rs.49.50 per litre, depending upon the distance of sugar mill from the depot/installation of the OMCs. The rates proposed would be delivered price at depot location and inclusive of all central and state taxes, transportation costs, etc which would be borne by the ethanol suppliers. The OMCs will incorporate Supply or Pay clause duly backed up with bank guarantee in their supply agreement with ethanol suppliers. OMCs will sign MOU with the state governments for a comprehensive system for uninterrupted inter-depot transfer of ethanol within a State. This may include annual excise permits to OMCs for movement of ethanol and other relevant measures.

With respect to media reports titled “Maruti bags army order for 4,000 Gypsys, its largest yet, Maruti Suzuki India after market hours on Wednesday, 10 December 2014, clarified that the company has received an order for supply of 4,141 Gypsy vehicles from the Indian Army in the ordinary course of business. Maruti said that the company sells about 12 lakh vehicles per annum with a turnover close to Rs 45000 crore. Keeping in view such a large scale of operations of the company, this particular order is approximately 0.34% of the total number of vehicles sold by the company in a year. Over the last 30 years or so, the company, from time to time, has been supplying Gypsy to the Indian Army and other para security forces, Maruti said. Hence, this event is neither unprecedented nor material enough to have a bearing on the operations/performance of the company, Maruti Suzuki India said.

Mahindra Ugine Steel Company after market hours yesterday, 10 December 2014 said that the scheme of amalgamation between Mahindra Hinoday Industries, Mahindra Ugine Steel Company, Mahindra Gears International, Mahindra Investments (India) Participaciones Internacionales Autometal Tres, S.L. (collectively referred as Transferor Companies) and Mahindra CIE Automotive (Transferee Company) and their respective shareholders and creditors (Integrated Scheme) has become effective on 10 December 2014. Further, Mahindra CIE Automotive will fix a record date for identifying the shareholders of the transferor companies to whom the shares of Transferee Company, as per the Integrated Scheme, will be issued pursuant to the effectiveness of the Integrated Scheme.

Mahindra CIE Automotive after market hours yesterday, 10 December 2014 said that that the scheme of amalgamation between Mahindra Composites and the company and their respective shareholders and creditors (Composites Scheme) has become effective on 10 December 2014. Further, a meeting of the Board of Directors of the company will be convened on 12 December 2014, to take note of the effectiveness of the Composites Scheme and to fix a record date for identifying the shareholders of the transferor company who will be issued shares pursuant to the effectiveness of the Composites Scheme.

Aurobindo Pharma after market hours yesterday, 10 December 2014 said that its board of directors resolved subject to the approval of the shareholders of the company and of other applicable laws, regulations etc., issuance of equity shares through a qualified institutions placement (QIP) to qualified institutional buyers (QIB) provided that the aggregate amount to be raised by issue of Securities shall not exceed a sum of $350 million or rupee equivalent thereof.

With respect to media reports titled BASF to invest Rs 380 Crs in new R&D Center, BASF India after market hours yesterday, 10 December 2014 clarified that the proposed investment of Rs 380 crore will be made by the wholly owned Indian subsidiary of BASF SE, Germany; namely, BASF Chemicals India (which is not listed in India) and not by the listed company, BASF India.

Puravankara Projects after market hours yesterday, 10 December 2014 said that its latest campaign on “The Greatest Online Sale on Homes” in partnership with Google's GOSF Campaign went live late on Tuesday, 9 December 2014 and has seen unprecedented interest from home buyers across the country. Over 125 homes were booked online in less than 12 hours of the offer going live, as home buyers took advantage of very lucrative offers from both the Puravankara and Provident Brands. The sudden spike in the traffic to unprecedented levels temporarily slowed down the website, and was restored immediately. The GOSF campaign is on till the 12 December 2014 and we are anticipating the interest in our homes to go up substantially over the next 3 days, Puravankara Projects said.

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi on Wednesday, 10 December 2014,, has approved the proposal of the Ministry of Petroleum & Natural Gas to close Engineers India (EIL) Asia Pacific Senderian Berhad (EILAP SDN BHD), a 100% subsidiary of Engineers India (EIL). The closure will be as per Malaysian Laws with regard to winding up. Since the company is unable to secure any business from 2004 despite making efforts for it, the continued existence of EILAP shall not serve any purpose and its closure would obviate the avoidable recurring expenditure incurred for maintaining the company.

Quasar India said yesterday, 10 December 2014, that a meeting of the Board of Directors of the company will be held on 19 December 2014, inter alia, to discuss and approve 5 for 1 stock split.

MSP Steel & Power said yesterday, 10 December 2014, that the Board of Directors of the Company at its meeting held on 10 December 2014, inter alia, discussed and approved that due to adverse market conditions - poor demand coupled with scarcity of raw materials, which has impacted the company's business, the Board of Directors has decided to opt for debt restructuring and the same has also been decided by the lenders of the company in its Joint Lenders Forum (JLF) meeting as Corrective Action Plan (CAP). Further the Board has decided that the company will approach all its lenders for the same.

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